Live 30 days on a budget – I dare you!

By glblguy


If I had to name just two personal finance techniques that have literally changed by financial life around they would be: Budgeting and the Debt Snowball. Budgeting because it’s allowed me to control my money rather than my money controlling me. The debt snowball because for years I struggled to try and get caught up my credit card debt but with little to no progress. Using the debt snowball I’ve paid off half of my debt in just 2 years and am on track to have it all paid off in another 1 -2 years (excluding our mortgage).

The concept of budgeting wasn’t new to me when I had my financial epiphany, but knowing how to budget was a concept I just couldn’t seem to grasp. I cannot even begin to tell you how many sheets of paper I wasted trying to create and live on a budget. I even tried using the limited budgeting capabilities of Quicken, no luck.

We would start out great, with budget categories for our spending. We would enter each transaction and associate it with a budget category. At first I would do this daily, then every couple of days, then weekly, and then as the transaction volume piled up, not at all. I would also get frustrated by the fact that I could never get the category amounts correct. I always seemed to miss something and always under allocated the category amount. Not to mention all of the unplanned expenses that kept coming up that would completely blow the budget.

After a month or two of not being able to follow the budget 100%, I’d give up. To be very honest, I never really liked the whole budgeting concept either. I didn’t like feeling like I couldn’t do what I wanted with my money. After all, I worked hard for that money. I should be able to spend it how I want. I deserved it right? WRONG.

Common budgeting mistakes

Here are just a few of the most common budgeting mistakes I’ve come across since I’ve been writing here on Gather Little by Little:

  • Trying to track your spending before you create a budget
  • Trying to be perfect
  • Not involving your spouse in the budgeting process
  • Not using a zero based budget
  • Trying to be too detailed
  • Expecting the budget to fix your problems – A budget is just a tool, it won’t fix all of the underlying problems that cause you money problems.

Track your spending before budgeting

Most all personal finance experts say that you should track your spending for 30 days before you create a budget. What they mean is that you should write down each and every expense you make for 30 days. Doing so will not only open your eyes to where you money goes, but it will serve as a solid foundation for building your budget.

Why wait 30 days? Spend an hour or so making your initial budget and begin tracking your spending using your budget. This has the benefit of not only tracking each and every expense, but also gets you started budgeting right away. “He who hesitates loses” right?

Rather than wait, go ahead and make a first attempt at a budget. Do so with the understanding that it won’t be perfect. Heck, chances are it may be completely wrong. A budget is is never perfect.

The perfect budget

The perfect budget is a myth. Understand one thing and accept it before you even try to start a budget: Your budget will never be perfect. Say it out loud with me: “My budget will never be perfect, and that’s okay.” If you’re in a public place and everyone is now looking at you, just smile and tell them you’re reading Gather Little by Little dot com.

This concept seems easy right? Well, for some of you it will be. For people like me who struggle to do anything unless it’s 100% correct this was an incredibly hard concept to grasp. I wasn’t okay with my budget not being 100%.  I didn’t like having to make adjustments to the categories and overspending. But I soon realized that budgeting is an iterative process. Each budget you make and the mistakes you make with it, serve as input into your next budget to make it more accurate. 6-12 budgets later, you’re budget should be about as close to perfect as it’s going to get.

When you get frustrated, remind yourself of this: A budget that is only 10% accurate is 10% more accurate than no budget at all. Always remember, personal finance is all about direction, not perfection. Personal finance is a journey, not just one hurdle you can jump, receive a trophy and move on. Trust me; there are many more hurdles after the first one.

Not involving your spouse

One of my key mistakes early on was not involving my wife in our personal finances. Early in our marriage, I took on the responsibly of managing our money. This included bills, retirement, savings and investing. I just disliked it less than my wife. Looking back, I have no idea why we felt the need to have just one of us do it.

If you’re married and your spouse is not involved in assisting with managing your personal finances, you’re doomed for failure. How many times have you heard the story about someone’s spouse going out and spending money, only to come home and get into a fight due to that spending? Why does this happen? Generally because the spouse that did the spending didn’t understand your current financial situation.

Make sure your spouse understands your financial situation. Involve them in the budgeting process. Do your finances together.

Not using a zero based budget

This was a big problem with my early budgets. I’d list out our income, then our expenses and subtract the difference. Generally for us, there was an excess of money. Whoo-hoo! Let’s go eat out, or buy something! Seriously, that is exactly what we would do. We would spend that excess only to find out a few days or weeks later that our budget categories were way off and we didn’t have the money we thought we had. I know: stupid. I agree.  We lived in the land of stupid for a long time.

What I later learned from Dave Ramsey is that a zero based budget is far more effective. A zero based budget is a budget where each and every incoming dollar gets “a home” meaning a budget category. Your budget is complete when your incoming minus your expense categories is zero. Each and every dollar you receive is allocated to an expense category. Had we allocated that extra “whoo-hoo” money to savings instead of blowing it, we wouldn’t’ be in the credit card debt we’re in now.

Trying to be too detailed

30+ years later in life, I’ve finally accepted that simplicity makes life far less stressful. My early failed budgets were far too complex. I had way too budget categories. To this day, I am still guilty of doing that, and have to perform a budget clean-up every now and then to “re-simplify” our budget.

The more complex your budget is, the longer it will take you to update it. The longer it takes you to update it, the more likely it becomes that you won’t. Keep you budget simple and easy to update and manage. After all, who wants to spend all of their time updating a budget? Can you say boring!

Expecting a budget to fix your problems

Breaking news: A budget will NOT fix your financial problems.

Far too many people expect a budget to fix all of their financial problems, it won’t. A budget is just a tool. The funny thing is, not only will a budget not fix your financial problems, it will most likely make you aware of a few more.

A budget does not: fix your need to buy things you don’t need, resolve your need to use credit cards to pay for things you feel you need to have right now, begin saving money for you, begin paying off your debt, diversify in your investments…Well you get the idea.

A budget will help you meet your goals and allow you to control your money, but only after you’ve fixed you.

High School ROTC

Bear with me and let me share a quick story, I promise this will relate to budgeting…

While at my oldest son’s high school orientation last month, a couple of students from the ROTC program spoke to the audience of students and parents. This kid impressed me. He joined ROTC on a dare from some friends during high school orientation thinking “I’ll wear the uniform, make an A, no problem.”  At the time he was only interested in skate boarding and hanging out with friends.

Four years later, he’s the top student in his ROTC program and one of the senior leaders. He’s received a full scholarship to the United States Air Force academy. The ROTC leader for the school said “Mark my words, this boy will be flying an Air Force fighter in a few years, I have no doubt in my mind.”

At the end of the kid’s talk about why he liked ROTC so much and how much it changed his life, he looked out at the audience and asked all of the future high school students who weren’t going to sign up for ROTC to raise their hands. He asked them to reconsider their decision and said “I dare you to join ROTC.”  Awesome speech for a high school student. Great speech for anyone.

I dare you!

Using the ROTC student’s technique, I dare you! If you aren’t currently budgeting, I dare you to start a budget and follow it for a month. Just 30 days. If you aren’t sure exactly how to get started, read my article Create and Follow a Budget. You can use paper, the Excel budget spreadsheet I developed, or better yet You Need a Budget. Use whatever works, but commit to creating a budget, tracking it and following it for 30 days.

My bet is that it will sell you on budgeting and chances are it will have a substantial and positive impact on your personal finances. Don’t believe me? Prove me wrong by trying it and pointing out the flaws.

If you’re willing to take my dare, add a comment below saying so. Also share with everyone when you will be starting and how you’ll manage and track it (paper, excel spreadsheet, software, etc). I firmly believe in making your commitments in writing and in public to make you accountable. I’ll check in in a few weeks to see how you’re doing and then again in 30 days or so.

Take my 30-day budget challenge…I dare you!!

Photo by: TheNickster

23 Responses (including trackbacks) to “Live 30 days on a budget – I dare you!”

  1. DDFD at Says:

    Great post! People usually don’t budget for two reasons:

    1) Budgeting takes work
    2) Budgeting is an eye opener for those in denial

  2. Miranda Says:

    Thanks for this post. Even though we’re in a reasonably good place, we still have a problem budgeting sometimes. We don’t ever overrun, but sometimes we don’t plan things out like we should.

  3. Dan Says:

    Speaking as one who went through the somewhat painful process of getting on a budget a few years ago:

    Never, never, never give up! Never, never, never give up! I say again, never, never, never give up!!

    When I went through the process the first time, I was horrible at it (and I’m an accountant, so I have no excuses!). I would constantly overspend, forget to follow my budget, and let it lapse for weeks, even months, at a time. But I didn’t give up. I kept at it until now, it’s as habitual and natural as going to the store or taking out the trash every day.

    I still have setbacks, but the thought of not living on a budget is now as foreign to me as the thought of living on a budget once was.

    “If you create an act, you create a habit. If you create a habit, you create a character. If you create a character, you create a destiny.”
    Andre Maurois

  4. Brian Says:

    Great article. I think this stuff should be taught in the public school systems. I also wanted to mention (and Dave Ramsey says this often) that when a budget works it is like getting a pay raise. My wife and I have been budgeting for the last 2 years. When we first started we found an “extra” $500-$1500 a month that we were wasting on nickle and dime things every day. Giving your money a purpose is a powerful thing. Also working on this with your spouse should significantly improve your marriage. I thought that my marriage was in a great place before budgeting, but now it is so much better. Each month it is us against the world! At first we lost a few battles, but we are now way ahead in this war.

  5. mattW Says:

    I think one of the most helpful things to know about having a budget is that it can be flexible. A budget is just the way you choose to allocate your money so that it is in line with your priorities and goals rather than your impulses. I adjust the amount for each of my categories as the month progresses and with a zero based budget (YNAB) it means you have to literally take money out of another category to do so. It turns the financial decisions you make into a question of priorities. Is this dollar better spent on what I want now, or on what I had allocated it for at the start of the month? Not having a budget means my greatest priority is whatever desires come first before my pay check runs out. Now with budgeting I am just months away from my dream motorbike all in cash. Budget +1.

  6. Baker @ ManVsDebt Says:

    “A budget that is only 10% accurate is 10% more accurate than no budget at all.”

    That is just an awesome quote!

    I think this is an amazing post for anyone who is struggling with a budget right now. In fact, it’s one of the best posts I’ve read all week. I really wish we would have had something in the form when we were struggling to find our budgeting routine.

    Great work!

  7. Bible Money Matters Says:

    I’ve been doing the challenge for a while now! But since we’ve been slacking for a couple of months, I’m in for a budget refresh! Good time to take a new look.

  8. Tiffany Says:

    I’m going to accept this challenge. I’ve been reading your blog for quite some time now and find lots of helpful advise and have managed to get some of my debt in check by doing so. The one thing I haven’t been able to do is create a budget and stick to it. I’ve tried and failed numerous times, but I’m willing to try again. So, no time like the present, right? And I love a good challenge! I’ll begin on May 1st and let you know how it goes.

  9. fern Says:

    To each his own. All I’ve ever done is track ALL my expenses, and i’ve been doing this for about 15 years now.

    Since i’ve never had problems with too much debt, tracking my expenses is all i need to do to stay on top of where my money goes and when i need to rein things in.

  10. Kim Says:

    Pay Day is Friday, I’ll start then. I do budget but have always had a hard time with the zero based budget. I think to get DH involved (dragging him along) I will do a cash only zero based budget. We’ll see……

  11. Tami Says:

    I’m up for the challenge – and it will be a challenge! I’ve been reading your blog and others regarding getting out of debt. I have a lot of knowledge that I need to put into practice. Thanks for motivating me!

  12. mb Says:

    well, i already started writing the budget b/c i’m moving to my very first apartment at the beginning of next month. I’ll take this challenge along with the rest however… lets see if I can stay with this budget idea for more then a month.

  13. That One Caveman Says:

    Count me in. I’m starting to gather data now and will implement the budget on May 1. I’m curious to see how well this goes!

  14. GrannyAnnie Says:

    I’ve been budgeting now for a little over a year, and for the first time in all my years, I was able to keep money in my savings account. It does help keep me spending less than I earn. For the last month, though, I’ve had some unusual circumstances going on financially, and my budget was nothing more than figures on a paper. This last paycheck I didn’t even bother to try to budget. As a result, my savings account has taken a hit. Things are getting back to normal, though, so this post is timely for me. I’ve created this paycheck’s budget and it’s all back in place. What a sense of relief! I had forgotten how out of control it feels not having a budget!
    For the question of high or low tech, this granny is no cyber genius. I wield a mean pencil, though. And I can draw lines on a paper with a ruler. This serves as the “master plan”. A spot on the wall in the home office sports a $7.00 corkboard, rounded out with a pretty calendar on which I write which bills are due when (2 weeks ahead of time), and dollar store envelopes for the budget categories. I got myself some pretty stickers to reward myself on the outside of the envelopes when I stay within budget. Who says first graders are the only ones who like stickers? You guys can keep the high tech stuff. My way is fun…

  15. Budgets are Sexy Says:

    I heart my budget like crazy….although i look at it more as a “financial snapshot” and include my net worth and c/c amounts and all there so i can see overall how it effects everything. Def. helps me to spend less knowing that the $ will jump in other areas ;)

    here’s my template budget in excel if it helps anyone…and GO BUDGETING!

  16. glblguy Says:

    Awesome! Thanks to all of you that decided to accept the challenge. Great comments and encouragement too!

    How about the rest of you?? Chicken??? :-)

  17. Funny about Money Says:

    This is REALLY a fine overview of budgeting and of the psychology of budgeting. In fact, IMHO it’s one of the best I’ve ever read.

    Like you, I had to blunder around to realize that subtracting your predicted expenses from income (even if you include a specific amount from savings in the “expenses” category) doesn’t work optimally. It’s a lot better to pigeonhole every dollar from the outset and to regard anything left above and beyond routine expenses as either debt-repayment dollars or savings dollars. Putting any “extra” money directly into savings guarantees that you will have enough to cover most unexpected expenses–the odd transmission repair, dental bill, burst pipe–and eventually provides enough for the occasional expensive indulgence. That’s something you need to keep yourself from feeling like you’re locked in the Perpetual Dungeon of the Budget Demons.

    Dude! Did you take that photo?? Stay away from the edge of the Canyon, will ya? Every year, a bunch of tourists fall into the Big Ditch after they’ve climbed over the barriers to snap daredevil pix. And that’s the end of ’em. Improves the gene pool quite effectively, of course…but there’s gotta be a better way.

  18. MP Says:

    Okay, I will try it!